London: Afghan President Hamid Karzai’s brother, Mahmoud, made a half-million pound profit in eight months on a luxury villa in Dubai bought with a loan from the Kabul Bank, which is at the centre of the country’s current financial and political crisis.
According to The Telegraph, Mahmoud Karzai borrowed seven million UAE dirham (GBP 1.23 million) from Kabul Bank, in which he is also the third-largest shareholder, in July 2007.
He used the money to buy a villa in Palm Jumeirah, the artificial island in the Gulf off the coast of Dubai. The seller was the bank`s former chairman, Sher Khan Farnood, who had used the bank to buy a USD 140 million property portfolio in Dubai which he registered in his own name.
Karzai sold the house eight months later for 10-million dirham (GBP 1.76 million), a profit of 3 million dirham, or just over GBP 500,000.
"Making a profit on a house is beautiful. I was so happy to make that profit," Karzai told the Daily Telegraph.
He said the question of whether it was a conflict of interest for a shareholder to be lent money to buy a property that was already financed by the bank should be referred to Farnood.
Karzai said he had bought the house so he could apply for a residency visa in Dubai, where his youngest daughter was about to enrol at school.
The house deal is one of a series of loans made to Karzai and others by the bank, Afghanistan’s largest. The Afghan Central Bank is now examining its operations.